2017 ONSC 5071

COURT FILE NO.: CV-15-534257

DATE: August 25, 2017

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Limen Structures Ltd. and 1033803 Ontario Inc. o/a Forma-Con Construction, as a joint venture v Brookfield Multiplex Construction Canada Limited

BEFORE: Master C. Albert

COUNSEL: B. Bowles and J. Nathwani, for the moving party (defendant)

Fax: 416-368-3467

J. Armel and D. Resnick, for the responding party (plaintiff)

Fax: 416-204-2826

HEARD: April 12 and 13, 2017

MASTER C. ALBERT

ENDORSEMENT

1. Brookfield Multiplex Construction Canada Limited (“Multiplex”) asks the court to summarily dismiss the delay claim of Limen Structures Ltd. and 1033803 Ontario Inc. o/a Forma-Con Construction, as a joint venture (“Limen JV”) on the basis that Limen JV failed to deliver proper notice as contractually required.

2. Multiplex was general contractor/ construction manager and Limen JV was the concrete formwork subcontractor on the project known as the Bay-Adelaide Centre Podium and East Tower (the “Project”). Limen JV claims a lien for $20,476,980.96, which includes a delay claim of $11,131,466.82. Multiplex’s counterclaim against Limen JV includes a $4.7 million delay claim.

3. On a motion for summary judgment the court must determine whether the substantive issue can be decided summarily by way of motion or whether the question that must be answered raises genuine issues that require a trial.

4. If the evidence before the court on this motion, or the evidence available using the enhanced post –Hryniuk[^1] summary judgment powers regarding evidence on a motion, raise a genuine issue or raise genuine issues that require a trial then the motion must fail. Alternatively, if the issues can be answered by way of summary judgment then Limen JV’s entitlement to advance its delay claim in whole or in part can be decided by motion, leaving quantification of delay damages for trial.

5. For the reasons that follow Multiplex’s motion for a determination of these issues by way of summary judgment must fail.

Background

6. Multiplex contracted with Limen JV to supply the concrete formwork, reinforcement, placement and finishing services for the Project for the fixed, HST-inclusive price of $36,866,250.00. The subcontract called for substantial performance by December 1, 2014.

7. Project delay resulted in part from Multiplex’s decision to change the crane to be used for Limen JV’s work.

8. Limen JV submitted its tender based on the tender specifications provided by Multiplex which called for a tower crane specified as the KNF336i Tower Crane (TC-1). The tender specified that Limen JV supply the crane. When Multiplex drafted and presented the subcontract to Limen JV to execute, Multiplex had changed the crane to a Comedil 630 Tower Crane. According to Limen JV, it would have cost an additional $800,000.00 to supply the Comedil 630 in place of the KNF336i. Instead, Limen JV proposed the FMC TG 1500 Tower Crane. Because renting that particular crane would have caused delay, Multiplex and Limen JV negotiated a change to the subcontract whereby the requirement for Limen JV to supply the crane was removed from the subcontract in exchange for a credit of $550,000.00, leaving it to Multiplex to arrange for and supply the crane.

9. Multiplex admitted that the reason for changing the specified crane was to accommodate the steel contractor. However, Multiplex did not supply a tower crane for Limen JV to use until November 2013. In the interim Multiplex arranged for smaller mobile cranes to be shared with other trades on site. The smaller cranes had a reduced load capacity thus increasing the time required for Limen JV to complete its work, and also requiring multiple work crews, thereby increasing Limen JV’s labour costs. Limen JV contends that Multiplex failed to properly supervise and co-ordinate the trades. Limen JV pleads that these failings delayed the project and increased Limen JV’s costs.

10. The evidence corroborates that Multiplex was aware of these delay and costs issues and met with Limen JV on several occasions in an effort to devise a plan to mitigate both delay and increased cost concerns arising from changing the crane. For example, Multiplex extended the deadline to complete the Level 8 Milestone from December 10, 2013 to December 23, 2013. Multiplex denies any agreement to pay Limen JV’s acceleration and delay costs to meet the extended deadline for this milestone.

Contractual Framework

11. An analysis of the issues raised on this motion begins with a review of the contractual framework, followed by a summary of the evidence adduced regarding communications between the parties about delay.

12. The subcontract conditions, attached to and forming a part of the subcontract, provide at Part 6.6 “Claims for a Change in Subcontract Price” as follows at paragraph SCC 6.6.1:

“SCC 6.6.1: If the Subcontractor intends to make a claim for an increase to the Subcontract Price, or if the Contractor intends to make a claim against the Subcontractor for a credit to the Subcontract Price, the party that intends to make the claim shall give timely Notice in Writing of intent to claim to the other party.”

13. Supplemental conditions attached to the subcontract as Appendix “A” replaced paragraph SCC 6.6.1 at SC-26 with the following contractual requirement:

“SC-26 replacing SCC 6.6.1: The procedure for making claims for either an increase or credit to the Subcontract Price, by the Subcontractor or the Contractor, are to be governed in accordance with SCC 6.2 – CHANGE ORDER and SCC 6.5 – DELAYS.”

14. In the original subcontract paragraph SCC 6.6.3, as amended by SC-26, provides:

“The party making the claim shall submit within a reasonable time within 10 days to the other party a detailed account of the amount claimed and the grounds upon which the claim is based.

15. By replacing the words “within a reasonable time” with the words “within 10 days” the parties put their minds to the outer time limit within which a claim and the grounds for a claim for a change in the contract price must be provided, including details of the amount claimed.

16. The subcontract initially addressed delay in paragraph SCC 6.5 (in particular, 6.5.1 and 6.5.4), but then replaced SCC 6.5 by SC-25. The amended wording of the subcontract is as follows:

“6.5.1. If the Subcontractor is delayed in the performance of Subcontract Work on the critical path of the latest schedule approved in writing by the Contractor by an action or omission of the Owner, Contractor, Consultant, or anyone employed or engaged directly by them, contrary to the provisions of the contract Documents and for which a workaround is not feasible, then the Subcontract Time shall be extended for such reasonable time as the Contractor may determine in consultation with the Subcontractor and the Owner. The Subcontractor shall be reimbursed by the Contractor for the reasonable out of pocket costs incurred by the Subcontractor as the direct result of such delay. A complete and detailed schedule itemizing these reasonable out of pocket costs shall be submitted to the Contractor and Consultant for approval, and if approved by the Contractor, a Change Order shall be issued in accordance with SCC 6.2 – CHANGE ORDER.”

“6.5.4. No adjustment to the Subcontract Time will be made or compensation for out of pocket expenses paid for delay unless notice in writing of such claim is given to the Contractor not later than ten (10) days after the commencement of the relevant delay, provided however, that in the case of a continuing cause of delay only one notice of claim shall be necessary. The claim shall include an estimate of the cost of the delay and its probable effect on n the progress of the Work.”

17. The parties put their minds to replacing a contractual provision that dealt with extending time with a contractual provision that deals with both an extension of time and compensation for delay. Preconditions to making a claim for the cost of delay are specified. Whether the preconditions were satisfied requires evidence and an analysis of the evidence to determine factual issues such as the latest schedule, the critical path, impact to the critical path and the date the delay commenced.

18. Another relevant contractual provision in the original subcontract is paragraph SCC 6.6: “Claims for a Change in Subcontract Price” at paragraph 6.6.3. The original provision was amended by supplementary condition SC-26 and provides:

“SCC 6.6.3 as amended by SC-26: The party making the claim shall submit within a reasonable time within 10 days to the other party a detailed account of the amount claimed and the grounds upon which the claim is based.”

19. The supplementary condition replaces the original ambiguous timeframe “within a reasonable time” to the specific timeframe “within 10 days”. The parties clearly contemplated a fixed time limit for making claims to change the contract price.

20. The subcontract addresses situations where a claim to change the contract price may involve continuing changes such that interim updates to the accounting may be required. The subcontract provides at paragraph SCC 6.6.4:

“Where the event or series of events giving rise to the claim has a continuing effect, the detailed account submitted under paragraph 6.6.3 shall be considered to be an interim account and the party making the claim shall, at such intervals as the other party may reasonably require, submit further interim accounts giving the accumulated amount of the claim and any further grounds upon which it is based. The party making the claim shall submit a final account after the end of the effects resulting from the event or series of events.”

21. Also potentially relevant to the analysis are the contractual provisions regarding change orders. As is typical in such contracts, SCC-6.2 requires Multiplex to provide to Limen JV a written description of the proposed change to the scope of work, to which Limen JV must respond with a price adjustment estimate and upon reaching agreement a Change Order is recorded. Appendix “A” adds the following supplementary condition regarding change orders:

“A Change Order shall be a final determination of adjustment in the Subcontract Price and Subcontract Time with respect to the change in the Subcontract Work specified in such Change Order. The change in the Subcontract Price stated in each Change Order, or the agreed payment accepted by the Subcontractor for the change in the Subcontract Work performed under each Change Directive, is the total all-inclusive cost of everything required by and consequent upon the Change Order or Change Directive, including without limitation all impact costs, loss of productivity costs, overhead costs, and profit. No other claim for additional costs will be considered or paid by the Contractor.”

22. Switching out the cranes was treated by the parties to some extent as a change to the subcontract because the price was adjusted downwards to reflect that Limen JV was not required to supply the crane. Query whether the on-site consequences of the substituted crane was or ought to have been treated as a request for a change order.

Communications between the parties

23. Limen JV relies on a series of written communications dated from May 14, 2013 to September 2013 as contractual delay notices. Multiplex contends that these notices were backdated and that Multiplex never received these notices. Limen JV also relies on an email dated May 15m 2013 as delay notice.

24. Multiplex contends that up until the week prior to arguing this motion Limen JV did not rely on the May 15, 2013 email from Limen JV to Multiplex as constituting contractual notice of delay, arguing that it reduces the credibility of Limen JV’s position on notice.

25. Limen JV further relies on documents dated October 29 and 31, 2013 and November 5, 2013 as contractual delay notices. Multiplex admits receiving these notices.

26. Finally, Limen JV relies on a series of emails exchanged in 2015 as meeting the contractual notice requirements. Multiplex’s position is that while initial notice was given as required by the subcontract, there is no evidence that Limen JV delivered the detailed notices that must follow the initial notices.

27. Limen JV contends that Brookfield Office Properties (“BOP”), the parent company of the owner[^2] of the premises and related to Multiplex, promised to pay Limen JV’s delay claims. Multiplex contends that there is no corroborating evidence to support Limen JV’s own self-serving affidavit evidence on that issue and no evidence of attempts by Limen JV to realize on BOP’s alleged promises to pay. Multiplex challenges Limen JV’s credibility on this issue on the basis that (i) it was never pleaded, (ii) the first time the allegation that BOP had promised to pay delay damages was in the responding motion record on this motion and (iii) the affidavit evidence is based on unattributed statements made by unnamed sources.

28. On this issue I find that there is insufficient evidence of probative value tendered on this motion to determine whether BOP promised to compensate Limen JV for delay damages. This raises a genuine issue for trial.

29. The chronology that follows summarizes some of the evidence filed regarding communications on the issue of delay.

Date	Communication	Comments
March 14 ,2013	Limen[^3] tender bid TC-1 KNF336i
April 23, 2013	Draft subcontract substituting TC-1.
April 25, 2013	Limen and Multiplex meet to discuss delay.
April 26, 2013	Subcontract executed.
May 14, 2013	Limen letter to Multiplex: delay at P4 footing	Multiplex alleges backdated.
May 15, 2013	Email chain between Limen and Multiplex re: delay arising from crane and cost impact.
May 28, 2013	Limen letter to Multiplex: re crane and delay.	Multiplex alleges backdated.
June 17, 2013	Meeting: Limen and Multiplex re: delay, design and crane changes, additional forces and costs to Limen.
July 15, 2013	Limen letter to Multiplex: delay at P3-P2 Centre Core area.	Multiplex alleges backdated.
Aug. 7, 2013	Limen letter to Multiplex: delay at Concourse Slab area.	Multiplex alleges backdated.
Sept. 3, 2013	Limen letter to Multiplex: delay at Ground Floor Slab area.	Multiplex alleges backdated.
Sept. 10, 2013	Meeting: Limen and Multiplex to discuss delays, reduced productivity.
Sept. 19, 2013	Meeting: Limen and Multiplex to discuss delays.	Conflicting evidence.
Oct. 8, 2013	Multiplex delivers notice of default to Limen JV alleging failure to meet the schedule.	Multiplex claims delay costs.
Oct. 11, 2013	Limen responds to Multiplex: delay due to inadequate crane, incomplete excavation and design changes. Limen gives notice of impact costs and delay.	Limen explains delay, asks for change directive to increase the contract price.
Oct. 25, 2013	Multiplex letter to Limen: alleges Limen failed to deliver contractual notice of delay.	Multiplex raises notice issue for the first time.
Oct. 28, 2013	Limen letter to Multiplex: encloses notice letters of May 14, May 28, July 15, August 7 and September 3, 2013.	Multiplex alleges notices were backdated. Credibility issues, conflicting evidence.
Oct. 29, 2013	Multiplex asks Limen for proof notices delivered.	Limen does not provide proof, blames Canada Post.
Oct. 29, 2013	Limen letter to Multiplex: delay at Centre Core area.	Multiplex admits receiving letter, denies it is proper notice.
Oct. 31, 2013	Limen letter to Multiplex: delay at South Core area.	Multiplex admits receiving letter, denies it is proper notice.
Nov. 1, 2013	Meeting: Limen, Multiplex and Owner re: delay and acceleration costs.	Conflicting evidence whether compensation discussed.
Nov. 4, 2013	TC-1 in place.
Nov. 5, 2013	Limen letter to Multiplex: delay “at the entire site”.	Multiplex admits receiving letter, denies it is proper notice.
Feb. 10, 2014	Limen letter to Multiplex: delay June 16, 2013 to Sept. 1, 2013, with Cost Impact calculations ($2,519,581.67).	Multiplex admits receiving letter, asserts out of time.
March 7, 2014	Limen/ Multiplex meet re: costs to complete.
May 26, 2014	Multiplex delivers interim final account to Limen.
July 16, 2014	Multiplex retains consultant Revay to review Limen delay claims.
Oct. 24, 2014	Limen letter to Multiplex: details of delay claim in draft “on a without prejudice basis”	Limen provides details of its delay costs up to July 31, 2014. Multiplex asserts: out of time.
Jan. 13, 2015, Jan. 20, 2015, Feb. 10, 2015, Feb. 24,2015	Limen letters to Multiplex re: delays due to various causes specified in the letters.	Multiplex concedes letters give preliminary notice of delay; alleges invalid because Limen failed to provide preliminary and actual delay costs.
May 15, 2015	Date in lien claim as completion date.
June 26, 2015	Limen JV registers claim for lien.

30. In summary, Multiplex contends that Limen JV failed to deliver the contractually required initial notices and then failed to deliver the contractually required details of its claim for an increase in the contract price by reason of delay. Multiplex asks the court to conclude that Limen JV’s delay claim is retaliatory to Multiplex’s October 2013 notice to Limen JV of default and that Limen JV backdated the notice letters in response.

31. Multiplex asks the court to strike (or reduce) Limen JV’s delay claim and reduce the security posted to vacate the lien claim by the amount of Limen JV’s unsustainable delay claim.

Analysis: contractual requirements and notices

1. Contractual requirements and performance

32. Multiplex and Limen JV are experienced, sophisticated contracting parties engaging in multi-million dollar contracts. The court’s analysis begins with the presumption that they knew and understood their rights and obligations under the subcontract.

33. The delay notice provisions in the subcontract serve two purposes: to provide a mechanism for Limen JV as the subcontractor to recover its costs of delay if it is not the cause of the delay, and to notify Multiplex of a delay claim within a specified timeframe so that Multiplex can take steps to investigate and mitigate the delay and costs associated with the delay.

34. The delay issues arose in part because the tower crane specified by Multiplex when Limen JV submitted its tender bid could not be used. Multiplex had changed the specifications, design and placement of the crane. The interim crane supplied by Multiplex in its place was smaller, with reduced capacity, and had to be shared with other trades.

35. Limen JV’s evidence is that instead of the timing and sequencing of work contemplated by the parties when Limen JV tendered, Limen JV had to compete with other contractors for use of the substituted crane. The evidence discloses that at times Multiplex allowed another subcontractor use of the crane in priority to Limen JV. Multiplex would have been aware that in doing so Limen JV’s work would be delayed.

36. Also, because the substituted crane had a reduced capacity, Limen JV’s work took longer and required more labourers than would have been required had the originally specified tower crane been used.

37. On this motion Multiplex asks the court to find that Limen JV failed to comply with the strict, technical notice requirements of the subcontract and even though Multiplex may have caused some of the delays by the manner in which it coordinated use of the crane by the various trades on site, Limen JV is precluded from advancing its delay claim to trial.

38. In response to either notices or other communications that Multiplex received from Limen JV, Multiplex investigated and made attempts to mitigate and correct the issues causing delay. For example, Multiplex arranged for additional cranes on site and agreed to amend the schedule. I am satisfied that Multiplex was aware of the delays it was causing to Limen JV’s performance of the subcontract. In issue is whether its knowledge in the absence of technically compliant notices would be sufficient to allow Limen JV to proceed to trial with its delay claim.

39. The extent of Multiplex’s knowledge of delay and its response to delay on the project raise genuine issues that require a trial.

2. Were Limen JV’s notices backdated?

40. Multiplex contends that Limen JV backdated several of the letters that Limen JV relies on as initial 10 day notices of delay. This applies to the letters dated May 14, 2013, May 28, 2013, July 15, 2013, August 7, 2013 and September 7, 2013.

41. The evidence of backdating relied on by Multiplex for the first two letters (May 14, 2013 and May 28, 2014) is that they are addressed to “Mr. Josh Currie Senior Project Manager”. Mr. Currie was not promoted from Project Manager to Senior Project Manager until June 7, 2013. The evidence discloses that Mr. Currie created an on-line Linked In profile on July 9, 2013, describing himself as “Senior Project Manager at Brookfield Multiplex”.

42. Multiplex argues that if Mr. Currie was not promoted to Senior Project Manager until June 7, 2013 and publicly presented himself with that title on July 9, 2013, then someone writing a letter to him using that title would likely have created the letter after July 9, 2013 or, at the earliest, after June 7, 2013. This evidence suggests that Limen JV backdated the May 14, 2013 and May 28, 2013 letters because they are addressed to Mr. Currie in a position he did not yet hold on the dates shown on the face of the letters. Limen JV’s reason for using the incorrect job title for Mr. Currie is unexplained.

43. On the 2016 leave motion Limen JV asserted through the evidence of Mr. Brannigan that Mr. Currie had held himself out to be Senior Project Manager on his Linked In page since May 2013. However, Mr. Currie’s evidence on this motion, corroborated by evidence of his Linked In profile, is that the Linked In account was created in July 2013, thereby contradicting Mr. Brannigan’s evidence. Limen JV did not provide an explanation or response to this evidence on the present motion.

44. The evidence that the May 14 and May 28, 2013 letters were backdated is strong. Limen JV addressed a letter to Mr. Currie as holder of a position that he did not yet hold and provided no reasonable explanation for doing so.

45. Multiplex also asks the court to reject the five delay notice letters dated from May through September 2013 based on Mr. Brannigan’s uncorroborated and inconsistent evidence regarding how the letters were prepared and delivered to Multiplex.

46. Mr. Brannigan’s evidence is that, as vice president of a company charged with carrying out a 36 million dollar contract, he personally created all five of the notice letters from scratch on his own computer, without saving backup electronic copies anywhere. Mr. Brannigan deposes that because the Project was a joint venture of Limen and Forma-Con, Limen decided that Mr. Brannigan’s computer work “relating to this Project would not utilize or be saved on the Limen servers.” Mr. Brannigan further deposed that he prepared the letters, printed them and did not save them or send them to anyone electronically.

47. Mr. Brannigan left Limen JV in or around April 2015. Limen JV registered its construction lien less than two months later, in June 2015. Limen JV’s position is that when Mr. Brannigan left the company “his computer was destroyed and all that remains is the physical file in relation to the project”. Limen JV does not accuse Mr. Brannigan of destroying the computer data and meta data. Limen JV’s use of the passive tense in its answer to the undertaking to provide the original electronic file for the letters of May 14, May 28, July 15, August 7 and September 3, 2013 is telling: it suggests that Limen wiped Mr. Brannigan’s computer when he departed, thereby destroying evidence that Limen JV should have known would be needed to support its lien claim.

48. This is a curious practice by a company involved in a multi-million dollar mega project and on the verge of registering a 22 million dollar claim for lien. Why is there no backup to Mr. Brannigan’s electronic files? Why would Limen not maintain an electronic record of documents needed for litigation?

49. On the issue of delivering the delay notices, in October 2015 Mr. Brannigan testified on his cross-examination that one notice letter was hand delivered. Subsequently, Mr. Brannigan deposed in his affidavit dated December 9, 2016 for use on this motion, that all notice letters were mailed. His later evidence is that all of the notices were mailed by regular letter mail through Canada Post, with Mr. Brannigan personally affixing the stamps and placing the letters in the mailbox, later clarified as the company’s internal depot for outgoing mail, on each occasion. Limen JV asks the court to accept that Canada Post failed to deliver all five letters. As to the inconsistencies in his evidence from 2015 and 2016, Mr. Brannigan explained on cross-examination that his memory had improved over the year. While it is possible for one’s memory to improve after the passage of time, it is more likely that one’s memory fades over time. His contradictory evidence calls into question the reliability of his evidence.

50. Multiplex asks the court to draw an adverse inference against Limen JV on the factual issue of whether the purported five notice letters were created in October 2013 and backdated. Limen JV argues that this factual issue should not be decided by summary judgment and that a trial is required.

51. I find Limen JV’s evidence and argument on the issue of preparing and delivering the delay notices lacking in credibility and troubling, but not so troubling as to persuade me to dismiss Limen JV’s $11 million dollar delay claim (or a substantial portion of it) summarily.

52. While the reliability of Mr. Brannigan’s evidence is questionable, in the absence of an opportunity to hear the trial evidence in its totality, assess the surrounding facts and circumstances, and consider whether Multiplex had actual notice of Limen JV’s claim taking into account the conduct of the parties, the court is not in a position to find as a fact on this summary judgment motion that Mr. Brannigan fabricated the early notices and perjured himself in testifying as to the preparation and delivery of the notices.

3. Were Limen’s notices too vague to be proper notice?

53. Multiplex contends that many of Limen’s letters relied on as notice were too vague to constitute contractual notice. The letters that fall into this category include all of those that Multiplex contends were backdated, as well as the letters dated October 29, 2013, October 31, 2013 and November 5, 2013.

54. Multiplex contends that Limen JV failed to provide the details required to be included in notices of change in the contract price and notices of delay causing an increase in price and delay in completion.

55. In particular, Multiplex asserts that the October 29, 2013 letter wherein Limen JV describes that it has encountered delay “at the centre core area”, the October 31, 2013 letter wherein Limen JV describes that it has encountered delay “at the South Core area” and the November 5, 2013 letter wherein Limen JV describes that it has encountered delay “at the entire site” are too vague to be proper notices of delay.

56. The February 10, 2014 letter from Limen JV to Multiplex refers to “Construction Schedule Recovery, Cost Impact” regarding the period from June 16, 2013 to September 1, 2013. It describes the claim as arising from Limen JV not having access to the Tower Cranes. Enclosed with the February 10, 2014 letter is a chart of the timeline and calculations of the costs of delay caused by lack of access to the Tower Crane from June 16, 2013 to September 1, 2013.

57. Multiplex argues that while Limen JV’s January 13, 2015 letter to Multiplex constitutes proper initial notice of a delay claim, it fails to include an initial estimate of the cost of delay as required by the subcontract and Limen JV failed to deliver a follow-up notice setting out the details of its claim.

58. Another issue is whether the subcontract imposed a limitation period after giving initial notice within which Limen JV was required to provide details of its delay claim, and whether Limen JV provided details within that timeframe or at all.

59. Multiplex contends that even if Limen JV gave initial notice, it failed to deliver the complete and detailed schedule with an itemized list of out of pocket delay costs required pursuant to SCC 6.5.1 of the Subcontract, as amended by SC-25.

60. Multiplex contends that Limen JV’s attempts to provide details of its claim for productivity losses and additional costs should be rejected out of hand because the notices (including the October 2014 notice) were delivered beyond the contractual 10 day notice period to provide details, and because in the case of the October 24, 2014 notice the letter stated that it was in draft and submitted “without prejudice”. In my view, Limen JV’s inclusion of the phrase “without prejudice” in that letter does not constitute a failure to provide details of its delay claim. Limen JV included the phrase so that it would not be restricted from adding details as they became known.

61. Also in issue is whether Limen JV’s February 10, 2014 letter meets the requirements of SCC 6.5.1, as amended by SC-25, to support delay claims first made in late October 2013. The letter included a chart for the period from June 16, 2013 to September 1, 2013, quantifying its delay claim at that time as approximately $2.5 million.

62. Limen JV subsequently delivered a letter to Multiplex on October 24, 2014 providing additional details and substantiation of its delay claim, together with a draft expert report on a without prejudice basis, in an effort to resolve issues.

63. Limen JV relies on the decision of Lederman, J. in Mar-King Construction Co. v Peel (Regional Municipality), 2005 CarswellOnt 5172 for the proposition that strict compliance with notice provisions may not be required where there has been some timely notice. Lederman, J. states at paragraph 23:

“where there has been some timely notice, though not perfect notice as required by the contract it has been held that, so long as there has been some notice sufficient to enable the owner to consider the claim and take steps to conduct its own investigation, the failure to fully comply with the contractual notice provisions cannot be said to be fatal to a claim brought by the plaintiffs”.

64. Mar-King suggests that the surrounding circumstances and particularly the conduct of the parties is relevant to determining whether the notice requirements of a contract have been met. In other words, there may be cases where strict compliance, as asserted by Multiplex as the applicable standard in this case, is not the appropriate and applicable standard. The complete trial narrative is required for the court to weigh the totality of the evidence and determine whether the notice given was sufficient to meet the contractual requirements.

65. Continuing the quote from Mar-King, citing TNL Paving Ltd. v British Columbia 1999 CanLII 5186 (BC SC), [1999] B.C.J. No. 1708 (B.C.S.C.) at paragraphs 333-334, Lederman, J. noted as follows:

“[T]he purpose of notice provisions is normally to enable the owner to consider the claim and its financial consequences, and take steps to protect its own position, including such things as information gathering and mitigating steps…

The form of the notice is not the governing factor, rather the issue is whether the notice contains enough information to satisfy the purpose for which notice is required.”

66. While the Mar-King case dates back to 2005, the imperative of taking a practical, common sense approach to the interpretation of contracts, rather than applying technical rules of construction, is reinforced in the more recent decision of the Supreme Court of Canada in Sattva Capital v Creston Molly Corp. 2014 SCC 53, [2014] 2 S.C.R. 633 at paragraph 47. In Sattva the court explained that the court should determine the intent of the parties. Surrounding circumstances are relevant and give context to understanding the parties’ intention. The contract must be construed as a whole: Ross-Clair v Canada (Attorney General) 2016 ONCA 205 at paragraph 48.

67. A trial is required in the present case to hear evidence as to all of the surrounding circumstances so that the court is in a position to consider the parties and whether Limen JV provided sufficient notice for Multiplex to be able to consider Limen JV’s claim and take steps to conduct its own investigation. Such an analysis may result in a finding that even if Limen JV failed to comply with the strict technical contractual notice requirements, such non-compliance is not fatal to its delay claim. Such findings cannot be made with confidence in the absence of a trial. To make that determination summarily without a trial would be unfair to Limen JV.

Are there genuine issues that require a trial?

68. Multiplex argues that strict technical compliance with the subcontract’s notice provisions is required, relying on Technicore Underground Inc. v Toronto (City of)[^4]. Limen JV asks the court to distinguish Technicore and the other cases cited therein on the basis that the present case is distinguishable because Multiplex took “corrective, mitigative, and investigative steps” thereby acknowledging that it had notice of Limen JV’s delay claims. Limen JV argues that the purpose of notice was met: Multiplex knew of the delay issues and the parties were working cooperatively to try to solve them.

69. Limen JV argues that Multiplex is asking the court to decide the motion in its favour by applying form over function to dismiss Limen JV’s $11,131,466.82 delay claim summarily. To do so the court would have to accept at this early stage of the action that the subcontract must be interpreted in a manner that calls for strict compliance with technical notice requirements. Limen JV argues that doing so would give precedence to form over function, ignoring the fairness and justice of the case and the actual knowledge and conduct of the parties.

70. Delay is a complex issue. Usually expert evidence is required. Delay is tied into issues that include management of the construction site, availability and coordination of equipment and trades, sequencing of events and many other factors. At trial the parties will likely lead evidence on all of these issues. Even if contractual notice (both initial and detailed) was not given formally in strict technical compliance with the subcontract, the evidence as a whole on the issue of delay is necessary to inform the court as to the knowledge and intention of the parties, the party or parties responsible for delay and the consequences of on-site conduct.

71. To preclude Limen JV from advancing its delay claim at trial based on the evidence available in the written record filed on this motion would be unfair and potentially prejudicial to Limen JV. This prejudice would not be overcome by conducting a mini-trial and applying the enhanced post-Hryniuk fact-finding powers on summary judgment.

72. The Supreme Court of Canada stated in part in Hryniuk at paragraph 66:

“On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers… If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). emphasis added”

73. In other words, if the written record is sufficient to determine the question before the court then summary judgment is appropriate. However, if it is not sufficient, then the court should consider invoking the enhanced fact-finding powers on a summary judgment motion in order to avoid a trial.

74. It is clear in this case that a trial will not be avoided by granting this motion. Only one of many issues would be decided, thereby perhaps reducing the scope of evidence required at trial but nevertheless a trial must follow. All that would be achieved by invoking the enhanced evidentiary powers and calling viva voce evidence would be to bifurcate the trial. In my view that is not the judicial efficiency that the Supreme Court of Canada intended to achieve with its decision in Hryniuk.

75. There is a significant issue of credibility raised on this motion: were the notice letters relied on by Limen JV created after the fact and backdated or is Mr. Branigan’s evidence, outlined earlier in these reasons, to be believed. Calling him to testify and be cross-examined before the court on this motion would not avoid a trial as contemplated in Hryniuk. He will still be required as a witness at trial and the court will likely be called upon at that time to assess his credibility.

76. Multiplex argues that with its decision in Hryniuk the Supreme Court of Canada initiated a change in litigation culture away from trials, encouraging litigants to turn to summary judgment procedures as an alternative to trials. While this may be so in less complex cases, its applicability to complex multi-million dollar cases is questionable where a lengthy trial on multiple issues is inevitable. In such instances the summary judgment motion is not invoked as an alternative to trial but rather as an attempt to bifurcate the trial y extracting one issue to be determined in isolation from the other, possibly related issues.

77. In my view Hyrniuk is not intended to be used by litigants to bifurcate trials through summary judgment motions. To do so would have the opposite result from the proportionate and expeditious approach to litigation that the Supreme Court of Canada encouraged litigants and the courts to take in Hyrniuk: it would give rise to the bifurcating of trial issues into multiple compartmentalized motions, on an issue by issue basis, thereby increasing complexity, costs and delay in achieving a final result. In such cases it is preferable to deal with all issues at a single trial. For these reasons, given that a complex trial is inevitable in this reference, unless I am satisfied that the issues placed before the court on this summary judgment motion are capable of adjudication on the written record the motion must fail.

78. This case is rife with conflicting evidence on critical facts that must be decided for the court to determine whether Limen JV is entitled to assert its delay claim. As in Trotter Estate 2014 ONCA 841 at paragraphs 78 to 79, the evidence in the present case on the issues raised on this summary judgment motion are extensive and conflicting. Credibility must be assessed, evidence must be weighed and oral evidence is required. The delay issues raised on this motion are only a fraction of the multiple and complex trial issues arising from Limen JV’s $36,866,250.00 construction subcontract as the concrete and forming contractor for the Bay-Adelaide Centre.

79. As stated at paragraph 50 by Karakatsanis, J. in Hryniuk v Maulin,

“a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute”.

80. In Fincantieri v Anmar 2015 ONSC 5468 where the amount in issue was in the range of $10 million, James J. states at paragraph 54:

“…Sometimes justice requires that the case unfold by way of trial narrative with oral testimony and cross-examination in the presence of the trier of fact. The case raises complicated factual and legal issues. Credibility will be a significant factor. The monetary value of the respondents’ claim is not yet clear but will likely be substantial. This is not a case where the proportionality doctrine elevates the need for summary disposition. At paragraph 33 of Hryniuk, Karakatsanis, J. poses the question: Is the added expense and delay of fact finding at trial necessary to a fair and just adjudication? My answer on these facts is in the affirmative.”

81. Similarly, in the present case, the issues raised on this motion are factually and legally complex. Credibility is a significant factor. The monetary value of Limen JV’s claim at risk on this motion is over $11 million. This is not a case where proportionality calls for a summary process. In answer to the question posed by Karakatsanis, J., I find that the added expense and delay of fact finding at trial is necessary in this case to achieve a fair and just adjudication.

82. In the present case I am of the view that it would not be in the interests of justice to decide the issue of notice in isolation by way of summary judgment in advance of the inevitable trial. To decide the issue of notice in advance of trial and as an isolated issue apart from the other multiple trial issue would not be a more proportionate or expeditious means to achieving a just result. It would have the opposite result: the issue of delay, which is claimed on both sides of the dispute, will permeate the trial. While the contract contains certain provisions regarding notice, there is some evidence that the conduct of the parties on the issue of delay may need to be considered when assessing delay damages as a whole and assigning responsibility for delay. It would not be fair to Limen JV to consider the technical notice issue in isolation from the rest of the case.

Conclusion

83. In conclusion, I find that Multiplex’s motion raises genuine issues that require a trial. The motion to strike Limen JV’s delay claim of $11,131,466.82, or any portion of it, by way of summary judgment is dismissed.

84. Costs: If the parties are unable to settle the issue of costs counsel may file written submissions on costs (maximum 4 pages plus cases, if any) with Limen JV filing submissions within 10 days of release of this decision and Multiplex filing written submissions within 7 days thereafter (maximum 4 pages plus cases, if any).

85. Continuing the reference: The next hearing for directions in this reference will take place on Monday, October 30, 2017 at 2:30 p.m. Counsel for Multiplex shall give notice to all parties of this date.

Master C. Albert .

DATE: August 25, 2017

2017 ONSC 5071

COURT FILE NO.: CV-15-534257

DATE: August 25, 2017

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Limen Structures Ltd. and 1033803 Ontario Inc. o/a Forma-Con Construction, as a joint venture v Brookfield Multiplex Construction Canada Limited

BEFORE: Master C. Albert

COUNSEL:

B. Bowles and J. Nathwani, for moving party (defendant) Fax: 416-368-3467

J. Armel and D. Resnick, for responding party (plaintiff) Fax: 416-204-2826

ENDORSEMENT

DATE: August 25, 2017

[^1]: Hryniuk v Mauldin, 2014 SCC 7

[^2]: The owners are: Bay Adelaide East Ltd., BPO Ontario Properties Ltd., BAC West Below Grade Sub GP Inc., BAC East Below Grade Sub GP Inc., BAC North Below Grade Sub GP Inc. and BAC Surface Inc. c/o Brookfield Properties Management Corporation, and Brookfield Canada Office Properties (“Properties”).

[^3]: Limen is the same as Limen JV for purposes of the chart

[^4]: 2012 ONCA 597